8-K: Catheter Precision Subsidiary Cardionomix Acquires Assets Related to Heart Failure Treatment

Catheter Precision's subsidiary, Cardionomix, has entered into an asset purchase agreement to acquire assets related to a late-stage treatment for acute decompensated heart failure.

Summary

• Catheter Precision, Inc. has formed a subsidiary, Cardionomix, to acquire assets from Cardionomic, Inc., which has ceased operations.
• Cardionomix will acquire assets related to Cardionomic's Cardiac Pulmonary Nerve Simulation (CNPS) System, a late-stage treatment in development for acute decompensated heart failure.
• The assets include patents and trademarks.
• The purchase consideration includes 1,000,000 restricted shares of Catheter Precision's common stock and a $1.5 million promissory note issued by Cardionomix.
• The note carries a 4% annual interest rate, with no payments due until the three-year maturity date.
• The closing of the acquisition is subject to certain conditions, including NYSE American approval for listing the share consideration and customary closing conditions.
• Cardionomix will need to raise additional funds to develop the acquired assets.
• Discussions with potential investors have begun, but there is no guarantee that sufficient funds can be raised on a timely basis or at all.
• Future financing is likely to dilute Catheter Precision's ownership interest in Cardionomix.

Sentiment

Score: 6

Explanation: The sentiment is neutral to slightly positive. The acquisition of assets is a positive step, but the need for additional funding and potential dilution create uncertainty. The revenue increase is a positive sign.

Positives

• The acquisition provides Catheter Precision with assets related to a late-stage treatment for acute decompensated heart failure.
• The acquired assets include patents and trademarks, potentially providing a competitive advantage.
• The promissory note's terms allow for deferred payments, providing Cardionomix with financial flexibility in the short term.
• Total revenues for the quarter ended March 31, 2025 were approximately $142,000, compared with $82,000 in the quarter ended March 31,2024, an increase of 73%.

Negatives

• Cardionomix will need to raise additional funds to develop the acquired assets, which may be challenging.
• Future financing is likely to dilute Catheter Precision's ownership interest in Cardionomix.
• The acquired assets are purchased on an 'AS IS' and 'WHERE IS' basis, with limited representations from the seller.
• The agreement will terminate if Closing does not take place on or before July 21, 2025.

Risks

• The closing of the asset acquisition is subject to closing conditions that may not be met.
• The ability to develop and commercialize the assets could be adversely impacted if the patents and trade names are not maintained.
• Obtaining financing for Cardionomix may be difficult, and even if obtained, it may not be adequate for development.
• FDA review of the assets is likely to be costly and lengthy, with no guarantee of clearance or approval.
• The medical device industry is highly competitive, and competitors may have greater resources.
• The success of pilot studies may not be repeated in future trials or lead to commercialization.
• The company does not have sufficient liquidity to fund its business unless it obtains additional financing or enters into a strategic transaction.
• The company's internal controls and disclosure controls were not effective as of March 31, 2024, June 30, 2024, September 30, 2024, and December 31, 2024, and as a result, without effective remediation of the material weaknesses that we have identified, we may not be able to accurately report our financial results or prevent fraud.

Future Outlook

The company expects to acquire assets of Cardionomic, Inc., and anticipates concluding financing for the new subsidiary to fund development of the acquired assets independent of VTAK's balance sheet.

Industry Context

The medical device industry is highly competitive, with several companies developing neuromodulation therapies for heart failure. The acquired assets will compete against existing and potential new drug therapies.

Comparison to Industry Standards

• The document does not provide specific comparisons to industry standards or comparable companies.
• However, it acknowledges that the medical device industry is highly competitive and that the acquired assets will compete with other neuromodulation therapies and drug therapies.
• Companies like Medtronic and Abbott are major players in the broader cardiac device market, but specific comparisons to their neuromodulation programs are not provided.

Related Party Transactions

• 82% of the common stock of Cardionomix was issued to the Company, 5% to David Jenkins, our Chief Executive Officer and Executive Chairman of the Board, 7% to FatBoy Capital L.P., an entity controlled by Mr. Jenkins, and 6% to certain business associates of Mr. Jenkins.
• These minority interests were issued to compensate these persons for bringing this business opportunity to the Company.

Stakeholder Impact

• Shareholders: Potential for long-term value creation through the development of the acquired assets, but also risk of dilution from future financing.
• Employees: Potential for new job opportunities within Cardionomix.
• Customers: Potential access to a new treatment option for acute decompensated heart failure.
• Creditors: The promissory note represents a new financial obligation for Cardionomix.

Next Steps

• Closing the asset acquisition, subject to the satisfaction of certain conditions.
• Raising additional funds for Cardionomix to develop the acquired assets.
• Seeking FDA clearance and approval for the CNPS System.
• Maintaining the listing of VTAK's shares on the NYSE American.

Key Dates

Keywords

Cardionomix, Catheter Precision, Asset Acquisition, Heart Failure, CNPS System, Cardiac Pulmonary Nerve Stimulation, Medical Device, Neuromodulation, Patents, Trademarks